Compliance with a subpoena is a painful duty that all citizens must bear.  In this article, we discuss how professionals may claim for their time in complying with a subpoena for production of documents.

Finding documents takes time and money, time and money which could be applied to more profitable pursuits.  Can a professional charge for their time in complying with a subpoena, especially where that time would have been more profitably and usefully applied elsewhere?

Rule 42.11(1) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) provides that ‘[t]he Court may order the issuing party to pay the amount of any reasonable loss or expense incurred in complying with the subpoena’.[1]

Expenses recoverable under rule 42.11(1) of the Rules include the losses and expenses a professional (and any persons assisting that professional) reasonably incurs in collating and copying documents and seeking advice, including as to privilege or the scope of the documents to be produced, where those activities prevent the professional from otherwise engaging in their normal income-earning activities.[2]  Such recoverable expenses and losses have been held to also include normal costs associated with providing a workplace and facilities, where the workplace and facilities may not be used because of the work being done to respond to a subpoena (ie necessary on-costs that are required to be incurred by the professional in any event).[3]   

The Court does not look to whether the costs are awarded on an indemnity or standard basis, as it would normally do in the context of legal costs, but rather the Court considers whether the expenses were reasonably incurred.  If that threshold is met, then that is sufficient to give rise to an entitlement to the expenses or losses incurred in accordance with rule 42.11(1) of the Rules.[4]

Whether the professional can claim for costs at their usual hourly rate, however, is not settled.  In Moriarty v Moriarty (2009) 243 FLR 409, Cronin J held that professional costs could not be claimed for three reasons:

  1. the applicable rules of court did not give a professional or business sector a right to claim expenses based upon their respective scales or charges;

  2. it becomes difficult for a court to assess whether the loss is to the recipient of the subpoena, or the firm, and whether the court is to factor into its deliberations overhead expenses such as taxation; and

  3. the subpoena process is an integral part of the administration of justice where compliance with a subpoena is a facet of community responsibility.[5]

That decision was handed down in the Family Court of Australia (as that Court then was).  That Court operates in a different context to other courts.  And so,  Young AJ subsequently noted in the New South Wales Supreme Court in Re Dovico; Ex Parte Mayne Wetherall:[6] “I must confess those reasons do not seem to me to be any justification for his Honour’s stance, but the decision may be able to be upheld because of the unique cost regime in the Family Court”. 

After making that observation, Young AJ went on to hold that:

  1. the rules of court are not to be narrowly construed; and

  2. where a solicitor acting for the party issuing the subpoena drafts a subpoena that is wide-ranging in nature, knowing that it will take time for a relevant professional to comply with the subpoena, it is far more equitable that their clients should bear the real costs of their action rather than the recipient of the subpoena.

In light of Young AJ’s comments, it is arguable that professional services firms may claim their time to comply with a subpoena, where compliance with the subpoena takes them away from their usual work for which they can generate revenue.  In those circumstances, the professional may be justified in charging the party issuing the subpoena at their usual hourly rate (or otherwise).  However, as noted above, that is not entirely settled and any firm wishing to test the bounds of that, ironically, may incur more costs!

However a professional seeks to claim their loss and expenses incurred in complying with a subpoena, the professional must promptly make the claim in the proceeding in which the subpoena was issued, as it will be difficult for any professional to make that claim when the subject proceeding is no longer on foot; if the claim for loss and expenses is not made while the proceeding is on foot, then the professional will most likely be left without any avenue to make a claim for their loss and expenses.

For completeness, we note that a failure to comply with a subpoena can constitute a contempt of court.  A professional should, therefore, take care to ensure they comply with the subpoena.

If you need advice in relation to the compliance with a subpoena, please get in touch with Jake Cole or Gianluca Rossi.

[1] This rule is mirrored in rule 42.11 of the County Court Civil Procedure Rules 2018 and rule 24.22 of the Federal Court Rules 2011.
[2] Please see Victoria International Container Terminal v Construction, Forestry, Maritime, Mining and Energy Union [2018] VSC 467 (VICT v CFMMEU), at [33]-[34]; Deposit & Investment Co Ltd (receivers appointed) v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267 (DICO v PMM), 289-290 (Bainton J); Danieletto v Khera (1995) 35 NSWLR 684, 688 (Bryson J).
[3] DICO v PMM at 290.
[4] VICT v CFMMEU at [33]-[34], [36]-[37]; Pyramid Building Society (in liq) v Farrow Finance Corp Ltd (in liq) [1995] 1 VR 464
[5] Followed by Riordan J in Hera Project Pty Ltd v Bisognin (No 4) [2017] VSC 270, [53].
[6] [2012] NSWSC 822 at [43].